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Chapter Eleven. Decision-Making Processes. ©2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e. Today’s Business Environment. New strategies Reengineering Restructuring Mergers/Acquisitions Downsizing New product/market development

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Chapter Eleven


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chapter eleven

Chapter Eleven

Decision-Making Processes

©2000

South-Western College Publishing

Cincinnati, Ohio

Daft, Organizational Theory and Design, 7/e

today s business environment
Today’s Business Environment
  • New strategies
  • Reengineering
  • Restructuring
  • Mergers/Acquisitions
  • Downsizing
  • New product/market development
  • . . . Etc.
decisions made within the organization
Decisions Made Within the Organization
  • Complex, emotionally charged issues
  • More rapid decisions
  • Less certain environment
  • Less clarity about means/outcomes
  • Requires more cooperation
a new decision making process
A New Decision-Making Process
  • Required because
    • no one person has enough info to make all major decisions
    • No one person has enough time and credibility to convince many
  • Relies less on hard data
  • Guided by powerful coalition
  • Permits trial and error approach
steps in the rational approach to decision making

Implement

Chosen

Alternative

Monitor

Decision

Environment

PROBLEM

SOLUTION

Choose

Best

Alternative

Define

Decision

Problem

8

1

7

2

6

3

Evaluate

Alternatives

Specify

Decision

Objectives

5

4

IDENTIFICATION

PROBLEM

Develop

Alternative

Solutions

Diagnose

Problem

Steps in the Rational Approach to Decision-Making
constraints and trade offs during non programmed decision making
Constraints and Trade-offs During Non-programmed Decision-Making

Bounded Rationality:

Limited time, information,

resources to deal with complex,

multidimensional issues

Decision/

Choice:

search for

a high-quality

decision

alternative

Trade-off

Personal Constraints:

Desire for prestige, success;

personal decision style; and

the need to satisfy emotional

needs, cope with pressure,

maintain self-concept

Trade-off

Trade-off

Trade-off

Organizational Constraints:

Need for agreement, shared

perspective, cooperation,

support, corporate culture and

structure, ethical values

Trade-off

Sources: Adapted from Irving L. Janis, Crucial Decisions

(New York: Free Press, 1989); and A. L. George, Presidential

Decision Making in Foreign Policy: The Effective Use of

Information and Advice (Boulder, Colo.: Westview Press, 1980).

choice processes in the carnegie model
Choice Processes in the Carnegie Model

Uncertainty

Coalition Formation

Search

Information is

limited

Managers have

many constraints

Hold joint discussion

and interpret goals

and problems

Share opinions

Establish problem

priorities

Obtain social support

for problem, solution

Conduct a simple,

local search

Use established

procedures if

appropriate

Create a solution

if needed

Conflict

Managers have

diverse goals,

opinions, values,

experience

Satisficing

Adopt the first

alternative

that is acceptable

to the coalition

the incremental decision process model
The Incremental Decision Process Model
  • Every step characterized by decision interrupts
  • Identification Phase
    • Recognition
    • Diagnosis
  • Development Phase
    • Search
    • Screen
    • Design
  • Selection Phase
    • Judgment (evaluation – choice)
    • Analysis (evaluation)
    • Bargaining (evaluation – choice)
    • Authorization
slide9
Learning Organization Decision Process When Problem Identification and Problem Solution Are Uncertain

PROBLEM IDENTIFICATION

PROBLEM SOLUTION

When problem identification is

Uncertain, Carnegie model applies

Political and social process is

Needed

Build coalition, seek agreement,

And resolve conflict about goals

And problem priorities

When problem solution is

uncertain, Incremental process

model applies

Incremental, trial-and-error

Process Is needed

Solve big problems in little steps

Recycle and try again when

blocked

illustration of independent streams of events in the garbage can model of decision making
Illustration of Independent Streams of Events in the Garbage Can Model of Decision-Making

Problems

Solutions

Middle Management

Problems

Solutions

Choice

Opportunities

Participants

Participants

Participants

Choice Opportunities

Choice Opportunities

Department A

Solutions

Department B

Problems

Solutions

Choice

Opportunities

Participants

Problems

Solutions

Choice

Opportunities

Participants

Choice

Opportunities

Problems

Participants

Solutions

Problems

Problems

Solutions

Participants

Participants

contingency framework for using decision models

Certain

Uncertain

Contingency Framework for Using Decision Models

Problem

Consensus

1

2

Certain

Individual:

Rational Approach

Computation

Organization:

Management Science

Individual:

Bargaining, Coalition

Formation

Organization:

Carnegie Model

Solution

Knowledge

3

Individual:

Judgment

Trial-and-error

Organization:

Incremental Decision

Process Model

4

Individual:

Bargaining and Judgment

Inspiration and Imitation

Organization:

Carnegie and Incremental

Decision Process Models,

evolving to Garbage Can

Uncertain

special decision circumstances
Special Decision Circumstances
  • High-Velocity Environments
  • Decision Mistakes and Learning
  • Escalating Commitment
decision styles
Decision Styles

Workbook

Activity